Impac Mortgage Holdings Inc., Irvine, Calif., reported 2Q13 profits of $1.2 million, compared with
The mortgage lending segment (which includes servicing) earned $3.43 million in the quarter, while real estate services earned $3.55 million. However, its long-term mortgage securities portfolio lost $4.6 million.
Loan originations during the quarter were $780 million, up from $674 million in 1Q13 and $533 million in 2Q12. During its conference call, company president William Ashmore said originations were balanced across Impac’s three channels, at 29% for correspondent, 29% retail and 42% wholesale. This gives the company better geographic dispersion in its portfolio as its retail base is in California.
In addition, purchase business keeps increasing, and that represented 40% of 2Q13 volume. However, the wholesale channel remains predominantly refi business and that will affected in the rising interest rate environment.
Impac had added staff as it expected a low interest rate environment. Ashmore said it had 540 employees at the end of the quarter, compared with 375 one year prior. While not providing specifics, he added that because of the rate increase, Impac has reduced its staff levels in certain areas.
While 3Q13 volumes will be lower than the previous year, Impac still expects full year volume to top 2012, he said.
The latest initiative for Impac is that it is reentering the warehouse lending business. As Ashmore explained on the call, while it will not be a huge profit generator for the company, offering these lines will allow it to capture more business through the correspondent channel.
He noted that the lines are not captives, but if the loan is being sold to Impac, there are benefits to the originator such as a lower haircut.
Going back into warehouse “is definitely a strategic move,” because correspondents are more likely to sell to Impac if the lines are available, Ashmore said, adding that it “takes pressure off of pricing margins in correspondent.”
The company
Ashmore also said during the call the company is looking at what to do strategically with its Excel Mortgage Servicing unit and AmeriHome Mortgage Corp., which it acquired a controlling interest in in 2011. He noted it acquired AmeriHome because of its approvals as a Fannie Mae/Freddie Mac/Ginnie Mae seller/servicer/issuer, but in the meantime Excel had obtained those same approvals.
As for servicing, Impac’s portfolio is now at $2.1 billion, up from $1.7 billion at the start of the quarter and $946 million one year ago. Furthermore, Ashmore said, the weighted average coupon of the mortgage servicing rights is lower than the current 30-year fixed rate, making it a valuable, long-term asset for Impac.
